LITTLE STERLING AVAILABLE

Southland Times, Issue 23827, 26 May 1939, Page 8

LITTLE STERLING AVAILABLE

Import Licences But No Funds BANK’S EXPLANATION TO MERCHANT (United Press Association) AUCKLAND, May 25. The fact that a licence to import goods has been issued to an importer cannot be taken as a guarantee that the Government will provide sterling funds was brought home forcibly to an Auckland importer: This information was contained in a letter from his banker who at th* same time mentioned that at the mohient the export funds were practically exhausted. It was explained by Mr E. O. Faber that his firm held, an unexpired licence to import goods to the value of £16,000, and had asked the bank to arrange a letter of credit for £BOOO on London to cover a shipment of tea now in transit. When the difficulty of making this sum available was explained the firm asked for £2OOO by the end of May and £5OO immediately. As a bank branch cannot remit more than £25 without permission from its head office this application was submitted to Wellington. The reply received by Mr Faber from the local bank manager was as follows: “My head office advises that as a matter of procedure the Reserve Bank grants permits and the Customs Department licences. These are authorities for trading banks to remit, but they do not automatically provide Sterling. This is provided from export funds and at the moment export funds are practically exhausted. They will accrue to a small extent from week to week again, but it is obvious that they will be far from sufficient to meet calls up to June 30 at any rate and therefore restriction is necessary. “At the moment we do not know that the sterling position will permit £2OOO being done for your company by May 30, and the amount applied for by your company, £BOOO, is out of the question meanwhile.” The letter added that all the banks were in practically the same position and that from the Wellington advice it was evident that the bank could give no guarantee that sterling funds would be available.

Having been issued with a licence to import, said Mr Faber, he had assumed that it followed that the Government would be able to provide funds in London. The position as it was now revealed left his firm in an awkward position.

“N.Z. WILL CONTINUE TO PAY DEBTS” MR LANGSTONE’S COMMENT IN LONDON LONDON, May 24. “New Zealand has always paid debts and will continue to do so,” the New Zealand Minister of Lands (the Hon. F. Langstone) told British and Australian journalists. “The creditor has responsibilities as well as the debtor and must see that the debtor is able to pay.” Mr Langstone, who is on his way to Geneva to attend a conference of the International Labour Office, admitted that the import restrictions might be hard on individuals and firms in both Britain and New Zealand but the Government must be free to decide whether its interests or national interests were more important. The Government desired expansion of trade but it was impossible to have a planned economy with exchange restriction. Discussing the position of the wool producers, Mr Langstonc said: “The Government does not seek trouble but will not refuse to face the facts if the situation should arise.” NO DELIVERY WITHOUT LICENCES WELLINGTON, May 25. The Customs Department at Wellington this afternoon confirmed the refusal to deliver goods without the production of licences. It was stated that there had been no change in the position existing up till the present.